Limited early successes in liver-based RNA interference (RNAi) therapies are enabling additional pre-clinical and clinical approaches. As with any therapeutic, achieving a functional effect is tempered by toxic side effects when a high RNAi dose is delivered. Toxicity and even fatality from high-level transcriptional RNAi based preclinical studies in mice was first reported by our group and confirmed by others. During the last 5 years, we made important contributions to our basic understanding of microRNA biology including pri/pre-miRNA processing, mechanism of Dicer cleavage, and properties related to miRNA-RISC loading. These studies have resulted in improved RNAi design strategies aimed at increasing efficacy and minimizing toxicity, especially those geared towards better treatments for HBV and HCV infection. Similar but distinct from RNAi, antisense oligonucleotide clinical trials are gaining in popularity includig targeting the highly abundant liver-specific miR- 122 (70% of liver miRNAs) to prevent HCV replication. We recently found that the newly transcribed miR-122- 5p-22nt miRNA isoform was selectively displaced from active RISC complexes after AAV-U6-shRNA delivery and that the functional reduction in miR-122 was responsible for the toxicity. We plan to investigate the mechanism(s) involved in how these changes in miR-122 occur and lead to toxicity. We propose a competition model where the shRNAs transcribed from a DNA template displaces miR122, which then causes both an up regulation of genes containing a miR122 target and altered transcription from the miR122 gene locus ultimately disrupting normal hepatocyte homeostasis and inducing liver injury. We also believe that precursor transcripts from the miR122 locus - a set of long-noncoding RNAs are not merely a set of precursor intermediates but have separate functions in cellular programming. We will use a variety of genetic tools and various mouse models to uncouple the expression of the various RNAs derived from the miR122 locus and determine their effect on gene regulation, hepatocyte homeostasis, and growth states. We will also evaluate the possible regulatory role that the miR122 gene has on the activation of the chr12qF1 microRNA locus implicated in the formation of hepatocellular carcinoma. In total, our proposal will further unravel the mechanism(s) of RNAi-induced toxicity and define the biological function of the most highly expressed and tissue specific miRNA gene locus- miR122 in healthy and diseased liver states.